The dip in gold prices dented major Chinese stock market indices on Friday, according to China Global Television Network (CGTN) market analyst Timothy Pope.
The benchmark Shanghai Composite Index was down 0.96 percent to 4,117.95 points and the Shenzhen Component Index closed 0.66 percent lower at 14,205.89 points.
The combined turnover of these two indices totaled 2.84 trillion yuan (about 407.59 billion U.S. dollars), down from 3.23 trillion yuan on the previous trading day.
The ChiNext Index, which tracks China's Nasdaq-style board of growth enterprises, gained 1.27 percent to close at 3,346.36 points on Friday.
CGTN market analyst Timothy Pope reported that a sharp drop in gold prices sparked a broad-based selloff across the markets.
"We did see things turn around (today). It wasn't a great day (for the Chinese Mainland markets) but it was far from reversing what has been a very strong month of January. The Shanghai Composite Index was down 1 percent, the Shenzhen Component was down 0.7 percent, but actually the ChiNext board was up more than 1 percent as we saw a slight turnover into -- rotation, rather -- into tech stocks. But for the Shanghai Composite -- we're still seeing a gain of more than 4.5 percent for the month of January -- that is very strong by any standards. Similar to December, after which we saw the regulators intervene with policies designed to slow down the pace of gains, and perhaps gently let a little air out of the market before it could inflate into a bubble," said Pope.
"This today, as with a lot lately, was all about gold. We saw gold prices drop as investors around the world bought U.S. dollars again, and that sparked off a fairly big correction. Anyone who's been paying even passing attention wouldn't need three guesses for which company contributed most to the losses on the Chinese mainland markets today -- it was gold miner Zijin, which was down 10 percent. But so were a host of other precious metals producers. Shandong Gold Mining down, Zhongjin Gold was down, and then the non-ferrous metals companies which had been riding the gold, silver, platinum wave over the last few weeks, like Jiangxi Copper and Chinalco, the aluminum producer," he reported.
"Next week could mark a bit of a shift for the markets, because it's the official start of the Spring Festival travel period in China, which generally sees the markets fall, and then trading slow down drastically. But the general fervor among traders in recent weeks could persist right up until the markets close for the holiday. So it's anyone's guess," the analyst said.
Gold price dip impacts Chinese markets on Friday to conclude otherwise strong January: CGTN Analyst
